How to Identify Support and Resistance Levels: A Step-by-Step Guide from Previous Highs and Lows to Role Reversals
When identifying support and resistance levels, the key is to first locate price zones where prices have repeatedly stalled or reversed direction, rather than drawing lines at every high and low on a chart. Start by identifying previous lows and highs, mark the major zones closest to the current price, and then check whether their roles reverse after a breakout. Support and resistance levels are not tools for predicting future prices with absolute accuracy.